In a decision announced Friday, the Environmental Protection Agency (EPA) asked refiners in 2014 to blend 15.2 billion gallons of renewable fuels, most of it ethanol, into US gasoline supplies.
That is about 16 less than what Congress specified in a 2007 renewable fuels law.
The law gives EPA the ability to lower the requirement.
The EPA said its decision is based on input from the US Department of Energy and US Department of Agriculture.
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The proposal seeks to put the Renewable Fuel Standard (RFS) programme on a steady path forward -- ensuring the continued long-term growth of the renewable fuel industry -- while seeking input on different approaches to address the E10 blend wall.
"Biofuels are a key part of the Obama Administration's 'all of the above' energy strategy, helping to reduce our dependence on foreign oil, cut carbon pollution and create jobs," said EPA Administrator Gina McCarthy.
We look forward to working with all stakeholders to develop a final rule that maintains the strength and promise of the RFS programme," McCarthy said.
EPA said nearly all gasoline sold in the US is now 'E10', which is fuel with up to 10 per cent ethanol.
Production of renewable fuels has been growing rapidly in recent years.
At the same time, advances in vehicle fuel economy and other economic factors have pushed gasoline consumption far lower than what was expected when Congress passed the Renewable Fuel Standard in 2007.
If gasoline demand continues to decline, as currently forecast, continuing growth in the use of ethanol will require greater use of higher ethanol blends such as E15 and E85," EPA said.